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Tuesday, May 26, 2015

Road Funds Part 3 - Property Taxes

Today Oregon roads are funded from a variety of sources. According to a 2014 study by The Tax Foundation study, the sources for Oregon funds are:

User Fees

Fuel Tax

License Fees

Property Tax

3.1%

22.4%

29.4%

45.1%

There is a concern that the fuel tax funds are diminishing as fuel economy improves and more plug-in vehicles hit the roads. The idea we'll look at in this part is eliminating the fuel tax completely and moving this burden to the property tax column. Let's run this through our seven criteria from part 1 and see how it scores:

1) Have some correlation to road wear - 0 point
This tax is correlated to the value of the property that you own and has no connection to how much you drive.

2) Not be excessively regressive - 80 points
This will increase the tax on people with non-farm property. The more property you have, the more you would pay. This is not a regressive tax.

3) Provide adequate funds for transportation maintenance needs - 100 points
Property taxes are currently used to pay for many things, including roads. It could be used to cover the fuel tax.

4) Be simple to pay - 100 points
Property taxes are already in place. This would just add to how much is collected. No new system is needed to make payments or collect funds.

5) Allow for collection without invasion of personal privacy - 100 points
No additional personal information would be collected.

6) Allow for out-of-state travel without paying in-state road fees - 0 points
If you own property here, you will pay, regardless of where you travel.

7) Tax drivers from out-of-state when they are using Oregon roads - 0 points
This would not collect money from people that travel here.

Summary

Adding it up with our scoring system, this solution of increasing property taxes only scores 380 points. This is less than the 520 points that increasing the gas tax scored.